Bank ombud returns R19.5 million to wronged customers

THE Ombudsman for Banking Services (OBS) clawed back R19.5 million for bank customers wronged by their banks in 2021, according to its annual report, which was released this week. However, four in five complaints went in favour of the bank: of the 8 039 complaints finalised, 15.9% (1 276 complaints) were fully upheld and 363 (4.5%) were partially upheld.

Complaints opened last year were up compared with the previous year, to 8 257 from 7 720. In the report, Reana Steyn, the ombudsman, says the Covid-19 pandemic has tested banking services to the limit, and 2021 presented serious challenges. “This is evidenced by the record number of complaints received and investigated by the OBS in 2021 where the number of complaints adjudicated by the OBS increased by 7% as compared to 2020,” Steyn says

Of the “Big Five”, Standard Bank garnered the most complaints (2 070), followed by Capitec (1 651), FNB (1 462), Nedbank (1 273) and Absa (1 068). Only FNB improved on its rating over the previous year (complaints were down by 33%).

However, it would be unfair to read too much into these figures, as the report does not take into account how many customers each bank has, nor does it give details on what percentage of complaints went in favour of customers per bank. For instance, Standard bank has about 10 million customers, while Capitec has about 18 million. So per million customers, Standard had 207 complaints while Capitec had only 91. One must also consider that customer demographics differ from bank to bank.

So what did customers complain about? Internet banking was the subject of most complaints received (about 1 400, or about 18%), increasing by 6% year on year. Of the complaints in the internet banking category, 41% dealt with phishing attacks. “This is an alarming and a worrying statistic, as it goes against the progress made in 2020 where the number of internet fraud victims had dropped significantly,” says Steyn.

The second-highest category was complaints about current accounts (about 1 250). Of these, 44% were service-related complaints, 40% were fraud related, and 14% were due to some sort of maladministration on the part of the bank. The report also details case studies of noteworthy cases, two of which are presented below:

Old bank card on profile

Mr A, a 65-year-old pensioner, was a victim of card swapping at an ATM. He contacted his bank immediately and asked that his card to be stopped. However, transactions totalling R29 160 went off his account.

Mr A complained to the ombudsman, saying that on the day in question he had immediately stopped the card at the ATM using his ID number. The bank, however, stated that he had stopped the wrong card.

Mr A responded that only had one card. The OBS’S investigation ascertained that the card number noted on the ATM when Mr A reportedly stopped the card was, in fact, his old cheque card number. He had upgraded his account and had been issued with a new card. However, the new card was not listed under his profile at the ATM.

It was tabled with the bank that it was reasonable to expect an old card would be removed from one’s profile once a new card was issued, especially under the profile to stop a card at the bank’s ATM.

“It was therefore our recommendation that the bank should reimburse the loss in full. The bank accepted our position in this regard and refunded Mr A in full,” the report says.

International transfer debacle The complainant, Ms B, queried the time taken by her bank to respond to and action her request for an international transfer of funds. She stated that it took the bank from February 21 to March 3, 2020 to effect the transfer. As a result of the delay, Ms B suffered a loss of R162 025 through fluctuations in the exchange rate.

The bank submitted that its service level agreement requires a customer’s request to be acknowledged within 24 hours. It said that the consultant should have acknowledged the request and communicated the process to the customer within 24 hours.

The bank further submitted that the service level agreement for overseas transfers provides a turnaround time of a minimum of three working days to a maximum of five working days. The customer had provided the requested documents on February 27, 2020. By that date, the consultant was on leave and she had noted a stand-in on her email out-of-office notification. If Ms B had forwarded her documents to the consultant’s stand-in on February 27, 2020, she could have avoided further loss in the exchange rate.

The OBS drew the bank’s attention to the initial delay in acknowledging the request, which in its view was the essence of the argument. The request for the transfer was made on February 21 2020 (Friday). According to the service level agreement, this request should have been acknowledged by February 24 (Monday).

“We were therefore of the view that had the bank abided by its own process, it would have been provided with the completed documents to proceed with the transfer on the evening of February 24, and would have noted receipt of same on the morning of February 25, prior to the consultant going on leave. Therefore we held that had the consultant acted timeously and in accordance with the service level agreement, the transfer could have been finalised within three days. It is unfair to prejudice the customer for the bank’s failure to follow its own SLA. It was on this basis that we recommended that the customer be given the benefit of the exchange rate on February 26. The bank accepted our recommendation and R162 025 was refunded to the customer,” the report says.

(See opposite page for contact details of the OBS.)